Defination of strategic management

The on-going process of formulating, implementing and controlling broad plans guide the organistion in acheving the strategic goodsgiven its internal and external environment.

What is stratergic management?
It cab be defined as the artand the science of formulating, implementating and evaluating cross- functional decisions that can enable an organistion to achieve its objective

All About Nestlé
Nestlé is a multinational packaged food company founded and headquartered in Vevey, Switzerland. It results from a merger in 1905 between the Anglo-Swiss Milk Company for milk products established by the Page Brothers in Cham, Switzerland, in 1866 and the Farine Lactée Henri Nestlé Company set up in 1867 by Henri Nestlé to provide an infant food product. Several of Nestlé's brands are globally renowned, which made the company a global market leader in many product lines, including milk, chocolate, confectionery, bottled water, coffee, creamer, food seasoning and pet foods. The company stock is listed on the SWX Swiss Exchange. Some of Nestlé's business practices have been considered unethical, especially the manner in which infant formula has been marketed in developing countries, which led to the Nestlé boycott from 1977.

nestle HQ, Vevey, Switzerland. Nestlé Corporate Business Principles will continue to evolve and adapt to a changing world, our basic foundation is unchanged from the time of the origins of our Company, and reflects the basic ideas of fairness, honesty, and a general concern for people. Nestlé is committed to the following Business Principles in all countries, taking into account local legislation, cultural and religious practices:

• •

Nestlé's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners. Nestlé does not favor short-term profit at the expense of successful long-term business development. Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust, and that without its consumers the Company would not exist. Nestlé believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization.

streamlining operations and reducing debt. developed a food for babies who were unable to breastfeed. His first success was a premature infant who could not tolerate his mother's milk or any of the usual substitutes. 1905-1918 In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company.• • Nestlé is conscious of the fact that the success of a corporation is a reflection of the professionalism. the company was operating factories in the United States. Germany and Spain. Farine Lactée Henri Nestlé was being sold in much of Europe. with chocolate the Company's second most important activity 1938-1944 . World War I created new demand for dairy products in the form of government contracts. Nestlé's production had more than doubled. By the end of the war. Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each of its markets. History 1866-1905 In the 1860s Henri Nestlé. The 1920s saw Nestlé's first expansion into new products. Nestlé's management responded quickly. Britain. 1918-1938 After the war Government contracts dried up and consumers switched back to fresh milk. conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucial. However. People quickly recognized the value of the new product. and soon. a pharmacist. By the early 1900s. after Nestlé's new formula saved the child's life.

. Crosse & Blackwell followed in 1960. Ironically. the war helped with the introduction of the Company's newest product. Diversification came with a shareholding in L'Oréal in 1974. 1944-1975 The end of World War II was the beginning of a dynamic phase for Nestlé. which was a staple drink of the US military.6bn acquisition was announced of Chef America. Inc. a USD 2. as did Findus (1963).S. Factories were established in developing countries. In 1947 came the merger with Maggi seasonings and soups. Growth accelerated and companies were acquired. ice cream business into Dreyer's. 1981-1995 Nestlé divested a number of businesses1980 / 1984. particularly Latin America. the most important being American food giant Carnation. Libby's (1971) and Stouffer's (1973). 1975-1981 Nestlé's growth in the developing world partially offset a slowdown in the Company's traditional markets. enhancing Nestlé's position as one of the world market leaders in this . Since 1996 there have been acquisitions including San Pellegrino (1997). both in 2002: in July. 2003 The year 2003 started well with the acquisition of Mövenpick Ice Cream. and in August. Spillers Petfoods (1998) and Ralston Purina (2002). Nescafé. 1996-2002 The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and world markets developed into more or less integrated trading areas. Nestlé's improved bottom line allowed the Company to launch a new round of acquisitions. There were two major acquisitions in North America.Nestlé felt the effects of World War II immediately. Nestlé merged its U. Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc. Nestlé's production and sales rose in the wartime economy. In 1984. Profits dropped from $20 million in 1938 to $6 million in 1939.

Nestlé is conscious of the fact that the success of a corporation is a reflection of the professionalism. and reflects the basic ideas of fairness. beliefs and actions of the Company behind brands in which they place their trust. In 2006. honesty. Jenny Craig and Uncle Toby's were added to the Nestlé portfolio and 2007 saw Novartis Medical Nutrition. Nestlé does not favour short-term profit at the expense of successful long-term business development. taking into account local legislation. although in certain areas. Nestlé recognizes that its consumers have a sincere and legitimate interest in the behaviour. . legislation is the most effective safeguard of responsible conduct. employees. as a general rule.product category. conduct and the responsible attitude of its management and employees. Business Principles Since Henri Nestlé developed the first milk food for infants in 1867. and that without its consumers the Company would not exist. additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization. Therefore recruitment of the right people and ongoing training and development are crucial. and saved the life of a neighbour's child. • Nestlé Corporate Business Principles (Sept 2004) Nestlé is committed to the following Business Principles in all countries. the Nestlé Company has aimed to build a business based on sound human values and principles. Gerber and Henniez join the Company. and a general concern for people. our basic foundation is unchanged from the time of the origins of our Company. and business partners. consumers. Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each of its markets. cultural and religious practices: • • • • • • Nestlé's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders. Nestlé believes that. While our Nestlé Corporate Business Principles will continue to evolve and adapt to a changing world.

We call this Creating Shared Value. see List of Nestlé brands. It is not philanthropy or an add-on. infant foods. we need to create value for the people in the countries where we are present . Brands: Nestlé has a wide range of products across a number of markets including coffee (Nescafé). For a list of some of these brands. confectionery and pet food. frozen and refrigerated foods. not only for its shareholders but also for society. health and wellness company based on sound human values and principles. . seasonings. performance and healthcare nutrition. other beverages. ice who supply to us. the Nestlé Company has aimed to build a business as the world's leading nutrition. but a fundamental part of our business strategy. and saved the life of a neighbor’s child.Shared Value: For a business to be successful in the long term it has to create value. in order to create value for our shareholders and our company. water. Mission: Henri Nestlé developed the first milk food for infants in 1867. Simply stated. our consumers and the communities where we operate. our employees.

Baby Foods Breast milk is best for babies. By the end of 1997. Pellegrino gave it the leadership in the Italian market. Nestlé began its entry into the water business in 1969 with a 30% stake in the owners of the Société Générale des Eaux Minérales de Vittel. Hungary. Germany. Nestlé Aquarel also uses the multi-source concept to satisfy new consumer expectations. In 2006. for the first time in its history. and the purchase of S. Before you decide to use an infant formula consult your doctor or clinic for advice. In 1998. Nestlé Waters is a thriving business with headquarters in Paris.6 bn in sales.Bottled Water Today. and is marketed in emerging countries. Italy and Spain. making CHF 9. Pellegrino. especially for water with a low mineral content that the whole family can drink. Belgium. Nestlé associated its name with a bottled water: Nestlé Pure Life. It is drinking water that has been treated and remineralized using a standardized industrial process to ensure purity and quality. this time in six European countries: Nestlé Aquarel. . Perrier. Vittel and Contrex. the Group was present on every continent. it sold its 72 brands of bottled water worldwide. The international brands of Nestlé Waters are familiar on tables throughout the world: Acqua Panna. A second product with the Nestlé name was launched in May 2000. A natural spring water currently from nine different springs in France. S.

and seeks dialogue and cooperation with the international health community and in particular with the WHO and UNICEF. i. We have been bringing life to milk since the very beginnings of our company. the medical profession and mothers and children everywhere. and the boy survived.. The World Health Organization (WHO) recognizes that there is a legitimate market for infant formula.e. is put at the disposal of health authorities. La Lechera and Carnation. We look for continued success through innovation and renovation in the development of milk based products. Nestlé markets infant formula according to the principles and aims of the WHO International Code of Marketing Breast Milk Substitutes. Another recent product introduction was Nesvita drinking yoghurt in Brazil with bifidus and Actifibras to aid digestion." The factors that made baby foods success in the early days of the Nestlé company — quality and superior nutritional value — are still as valid today for the wide range of infant formula. we have brought enjoyment to good food with the introduction of Nestlé MUNCH . he wrote: "During the first months. Nespray. the mother's milk will always be the most natural nutrient. when a mother cannot or chooses not to breast feed her child. cereals and baby food made by Nestlé. In 1869. Nestlé's expertise as the world's leading infant food manufacturer. originally with well known shelf stable. Henri Nestlé's 'Farine Lactée' was the first product to bear the Nestlé name. Dairy Products Nestlé has long been a major player in the dairy industry. We introduce new products constantly: in the USA liquid Coffee Mate in new flavors. Nestlé's new food worked. Nestlé's product was never intended as a competitor for mother's milk. dried milk powder brands such as Nido. In the UK and Ireland.The production of infant food goes right back to the origins of the Nestlé Company. and also in a soy variant for those who want to enjoy a creamy taste without milk. In 1867 a physician persuaded Henri Nestlé to give his product to an infant who was very ill — he had been born prematurely and was refusing his mother's milk and all other types of nourishment. From the very beginning. to identify problems and their solution. gained over more than 125 years. and every mother able to do so should herself suckle her children.

technological innovation. The story of its popularity is however connected with the invention of technology to make it on an industrial scale. The ice cream cone is the most environmentally friendly form of packaging. Today. gave rise to the crunchy foodstuff we know today as breakfast cereal. made the product boom. Sweet corn. squeezable strawberry-shaped packs of strawberry yoghurt for children's lunch boxes. but the highest per head consumers are in New Zealand. and together with the invention of the ice cream cone. and to keep it cold once made. food was frozen with the aid of ice. both making and freezing it became easier. the United States is the absolute leader in terms of volume consumed. Breakfast Cereals Although cereals have been with mankind in one form or another for millennia. which was either stored in ice houses or shipped from cold countries. But then at the end of the 19th century. it was not until the mid 19th century that scientific research. mixed with salt. and its rapid growth has been characterized by strong branding and lately the launching of breakfast cereal brands into the fast-growing cereal bar market. The joint venture began in 1990.BUNCH Squashums. Ice Cream There are many myths and stories as to the invention of ice cream: was it Marco Polo who brought it back from China (along with pasta)? Probably not.Garlic. Cucumber Ice Creams . . Cereal Partners Worldwide. considering he most likely never visited China. Ernest E Hamwi is credited with its invention. and the influence of a group of American health reformers. Tomato. Nestlé has a joint venture with General Mills outside North America. Flavors you'd never have thought of and yet they're commercially available: • • Sorbets . A Syrian from Damascus. which is active in more than 80 countries. Avocado. Before refrigeration techniques.Smoked Salmon.

800 people from more than 50 countries work in our worldwide research. whole grain and fiber. We are leaders in infant nutrition. performance nutrition. Nestlé Nutrition was set up in 2005 as an independent entity within the Nestlé Group with specific responsibility for the areas of infant nutrition. In all these categories we offer products that are preferred over those of our competitors in terms of taste and in addition. water. Beverages . powdered beverages. The focus of our R&D is on products that provide specific health and nutritional benefits. development and prodict testing centers.Apparently. We review the nutritional content of our products and reduce sensitive nutrients such as salt. such as calcium. culinary and cereals. we have progressed beyond these beginnings to become a world leader in key categories of Nutrition. Today. Hamwi rolled a waffle to contain ice cream and the cone was born. We also add further health benefits in the shape of Branded Active Benefits such as Prebio for digestive comfort. Actige-E to help release energy from food. Nutrition Nutrition has been a central theme for Nestlé ever since 1867. dairy. In 2006. healthcare nutrition and performance nutrition. when Henri Nestlé first invented infant food to help save the life of a neighbour's child. during the 1904 St Louis World's Fair.7 billion. Around 3.60/40+. Health and Wellness to offer our consumers the food choices they need to achieve the healthy lifestyles they want. We back this with the largest private research organisation in the world entirely dedicated to basic research in food and nutrition. medical nutrition. our total research and development spend was CHF 1. and increase others that are considered positive for health. This is our rigorous testing system that combines a taste preference with a scientific nutritional assessment. BL for immunity and protection and NutrriActive-B to help growrh of children. his waffle booth was next to an ice cream vendor who ran short of dishes. sugar and trans fatty acids. offer a clear nutritional advantage . weight management.

From the beginning. In 1875. The result — milk chocolate. Nescafé has become one of the world's best-known brands. turning raw. Later. Read about Nescafé's Sustainable Agriculture Initiatives in Vietnam and Nicaragua. who introduced chocolate to the Old World. These are distributed by Nestlé's joint-venture with the Coca-Cola Company. bitter cocoa beans into what one 17th century writer called "the only true food of the gods" has been a fine art. the Aztecs consumed chacahoua and used the cocoa bean for currency. Nestlé scientists perfected a powdered coffee product that was introduced in 1938 under the brand name Nescafé – the world's first commercially successful soluble coffee. where it swiftly became a favorite food among the rich and noble of Europe. Nestlé's ready-to-drink beverages Nestea and Nescafé are sold in various forms (cans. Nestlé is also present in fruit juices (Libby's). Nesquik. In addition. bottles). Its leading brands. an almost otherworldly flavor could be created. It became so popular during World War II that for one full year the entire output of the Nescafé plant in the United States (more than 1 million cases) was reserved for military use only. . Milo and Nescau are very popular with a growing number of young people around the world. they offered cocoa beans to Cortez. Chocolate & Confectionery The story of chocolate began in the New World with the Mayans. after years of trying. a 31-year-old candy maker in Vevey named Daniel Peter figured out how to combine milk and cocoa powder. Nestlé is a major producer of chocolate-based and malted drinks.In 1937. Beverage Partners Worldwide. Since then. as well as espresso coffee in capsules (Nespresso). In 1523. Visit our Creating Shared Value section to read Coffee FAQs and further information about coffee growing initiatives worldwide. Centuries ago it was discovered that by fermenting and roasting the beans. who drank a dark brew called cacahuaquchtl. a delicate mixture of alchemy and science.

Maggi merged with Nestlé in 1947. sauces and flavorings. By the turn of the century. With the Industrial Revolution came factory jobs for women and less time to prepare meals. Kohler. Maggi & Company was producing not only powdered soups. Kohler relied on Nestlé for milk and marketing expertise.Peter. Prepared Foods Convenience foods — packaged soups. Look in our Creating Shared Value section for information about responsible cocoa growing. started a company that would quickly become the world's leading maker of chocolate. prepared sauces and flavorings —date back more than a century. The problem was so widespread that it became the object of intense study in 1882 by the Swiss Public Welfare Society. but bouillon cubes. For three decades the company called Peter. Buitoni. which offered a series of recommendations. including an increase in the consumption of vegetables. the authentic Italian brand. We are also an industry leader in the sector. The results — two instant pea soups and an instant bean soup — helped launch one of the best known brands in the history of the food industry. Cailler. a miller with a reputation as an inventive and capable businessman. the almost inevitable merger took place as Nestlé acquired Peter. became part of the Nestlé Group in 1988. to create a vegetable food product that would be quick to prepare and easy to digest. Cailler. and we consolidated our position in Europe with the acquisition of the . which has been producing pasta and sauces in Italy since 1827. Nestlé entered the petcare business with the purchase of Carnation in 1985. frozen meals. In 1929. a friend and neighbor of Henri Nestlé. The Society commissioned Julius Maggi. Petcare Petcare has a shorter history in our company than other sectors but we bring the same care – and research-based expertise – to this field as we do to any other – for your pet's sake.

These include state-of-the-art nutritional innovations. Soft Drinks. Sara Lee Corp ($7.7bn).5bn).1bn) Food revenue. Dan one Group ($8. Nestle (Coffee. Water) ($4.4bn). Starbucks (Coffee) ($4.7bn). Kellogg Co.5bn). Water) ($19bn). Soft Drinks.7bn).Spillers brand in 1998. PepsiCo ($16bn est. Powdered Drinks) ($4.6bn).0bn).6bn). creating Nestlé Purina PetCare. Red Bull (Energy Drinks) ($1. Technologies to develop and add value continually for pets and their owners are engineered into our current product range.5bn) . PepsiCo (Juice. and further with the acquisition of Ralston-Purina in 2001. Sara Lee (Coffee) ($2.5bn). Competitors: In food: Unilever ($28. ConAgra ($14. Kraft Foods (Coffee. Soft Drinks. or innovations for the most discriminating of pets and their owners. Ocean Spray (Juice) ($1.5bn).6bn) Cadbury Schweppes (Soft Drinks) ($4. HJ Heinz ($8. ($9.4bn) Danone (Soft Drinks. Kraft Foods ($25.0bn) In Pet care: . Water) ($21bn). such as products which help maintain feline urinary tract health.6bn) In Non-Alcoholic Beverages: Coca-Cola (Juice. Cott Corp (Soft Drinks) ($1. Unilever (Tea ) ($4.). Tchibo (Coffee) ($2.

Procter & Gamble (Iams) (12%) Research centre of godrej : They have their own research centre where they conduct market research & develop healthy product. Outside of the Nestlé Group. It extends the boundaries of consumer expectations and satisfaction beyond the classical sensory experience. . NRC scientists work in collaboration with leading international universities and research institutes for short-term projects and long-term partnerships. NRC scientists share and utilize information with the worldwide Nestlé R&D Network. Today’s discoveries provide the knowledge for tomorrow’s innovations. Colgate-Palmolive (11%). Innovations and Publications Achieving health and wellness through foods is a challenging adventure.Nestle Purina (31%). In addition to the eight scientific departments within NRC which span a variety of scientific disciplines. Structure and Network The global breadth of the research network both inside and outside of the Nestlé Research Center provides our scientists with an extensive scientific knowledge base and unique collaborative opportunities. Much groundbreaking scientific work has emerged from the Nestlé Research Center in the form of significant product innovations and recognized scientific publications.

have agreed to co-develop infant and child nutrition products offering immune system benefits to infants and children.We are pleased to inform you that Nestlé has received the regulatory approvals required to complete the acquisition of the Novartis Medical Nutrition business. Nestlé and Probiomics believe that probiotics. very common ailments.We are pleased to inform you that Nestlé has completed the acquisition of the Gerber Products Company announced in April 2007. We will now start the integration of Gerber into the Infant Nutrition business unit of Nestlé Nutrition Nestlé completes acquisition of Novartis Medical Nutrition 02 July 2007 . We will now start the process of integrating the Novartis Medical Nutrition business into the HealthCare Nutrition business unit of Nestlé Nutrition. a unit of Nestlé SA. Improving the immune systems of infants and children will help protect the infants and children from infections and allergies.FUTURE PLANNING: Probiomics Ltd and Nestlé execute global license agreement for probiotic use in infant nutrition 15 October 2007. The collaboration with Probiomics is part of the Nestlé Nutrition commitment to invest in cutting-edge science that can enable it to launch innovative products and services which provide consumers with clear and tangible benefits. 1 September 2007 . fermentum strain – a beneficial bacteria which occurs naturally in the gastro-intestinal tract – offer an exciting option for improving the immune systems of infants and children. Probiomics Ltd and Nestlé Nutrition. . Probiomics currently markets the probiotic under the PCC brand. and in particular Probiomics’ proprietary L. Nestlé completes acquisition of Gerber Vevey.

Poland and Central America. furthermore. further improvement of operational margins is expected.95 billion. medical nutrition. healthcare and performance nutrition with a dedicated and focused sales force. The transaction. Chairman and CEC) of Nestlé. baby food. With net proceeds of sales for 2007 estimated at USD 1. Nestlé has agreed to acquire Gerber. said: "The acquisition of Gerber is the perfect complementary fit. the iconic US baby food brand. consolidating its Leadership in Nutrition Vevey.and. is subject to regulatory approval. weight management and performance nutrition. This is a major step in the transformational journey of Nestlé toward a Nutrition. but it also constitutes a decisive step ta establish Nestlé Nutrition as the undisputed global leader in the nutrition field. Gerber is also a provider of baby care products and juvenile lite insurance in the US. which cornes in the wake of the Jenny Craig and Novartis Medical Nutrition purchases. covering all important sectors: infant formula. The acquisition of Gerber. will transform Nestlé Nutrition into a business approaching CHF 10 billion in sales with an enhanced critical mass and access to the Group's global R&D network to drive innovation. giving the company significant scale in infant. the USA.recognized by virtually ail mothers in the USA . The company has enjoyed good growth in recent years and. Health . as a result of expected cost synergies. With this acquisition. 12 April 2007 . from Novartis for a total amount of USD 5. which is expected to be completed during the second half of 2007. enjoys strong positions in Mexico. Peter Brabeck-Letmathe. Nestlé Nutrition will aise leverage its existing strong core business in North America. It not only gives Nestlé the leadership position in baby food. The moue gives Nestlé the number one position in the world's largest single baby food market. and clearly establishes Nestlé Nutrition as the global leader in this sector.5 billion. with annual sales of around CHF 10 billion.Nestlé to acquire GERBER. Gerber is among the most trusted US brands .As part of the continuing drive to reinforce its leadership in nutrition.

The collaboration with BLIS Technologies is part of the Nestlé Nutrition commitment to invest in cutting-edge science that can enable it to launch . a unit of Nestlé SA. Nestlé Nutrition will commercialise the probiotics under licence as part of its range of infant nutrition products. Nestlé Nutrition will be responsible for clinical studies. this agreement is a major step. If the project proceeds according to plan.New Zealand biotechnology company BLIS Technologies and Nestlé Nutrition." BLIS Technologies Ltd and Nestlé Nutrition agree to work on Probiotics for infant nutrition products Dunedin (New Zealand) and Vevey (Switzerland). It is my great pleasure to welcome the employees of Gerber to the Nestlé Group. Upper respiratory tract infections are very common in infants and there are no effective methods of preventing or reducing the risk of these infections. Nestlé Nutrition will fund BLIS Technologies' research efforts in this area through a series of milestone and R&D expense payments.can boost infants' immune systems and may prevent upper respiratory tract infections. BLIS Technologies will be responsible for development of probiotics suitable for incorporation into infant nutrition products and supplying the probiotics for clinical trial purposes. This will enable the company to build a platform of probiotics with significant market opportunities. Scientific evidence suggests that the BLIS Technologies' probiotics . 28 March 2007 . Nestlé Nutrition and BLIS Technologies will work exclusively together to incorporate these probiotics into infant nutrition products and provide clinical evidence of their effectiveness Under the terms of the agreement.and Wellness Company. For BLIS Technologies. the company will commit significant resources to the development over the next three years.beneficial bacteria which occur naturally in the upper respiratory tract and which have "built-in" defences against pathogenic or disease causing bacteria . have agreed to carry out research and development of BLIS probiotics for use in infant nutrition products and targeting upper respiratory tract infections.

In practice.” Marc Pfitzer. air. They are also in welfare of farmers: Farmers and Agriculture Zhengjun Wang. sometimes helping entire regions to increase agricultural productivity and economic . and help build traceability systems. this means. North-East China. who owns 9 cows and 6 calves. energy and genetic diversity. Foundation Strategy Group Nestlé’s practice of sustainable agriculture seeks to address the environmental. A Nestlé project in the milk district now provides farmers with proper manure storage facilities. And it is of urgent concern as global caloric consumption is set to double in the coming 25 years. Ensuring sustainable agricultural practices is in the interest of the entire food chain. water. which reduces impact on water sources and also creates a biogas energy source for farmers’ homes. minimize the risk of contaminants in raw materials. for example. since 1990. helping to promote farming methods that preserve soil. Rural development Nestlé has a long history of helping farmers to be better and more prosperous suppliers. which will require producing two to three times more agricultural products on the same amount of cultivated land. “Depletion of natural resources and problems faced by rural communities affect agricultural productivity. improve labor conditions. This has a positive long-term impact on economic and environmental development and standards of living. boost farm income through transparent pricing. social and economic dimensions of farming and sourcing. These and other forums allow Nestlé experts to contribute experience and ideas to promote sustainability.innovative products and services with clear consumer benefits. has been supplying milk to the Nestlé plant in Shuangcheng. from producers to consumers. improve productivity and yields. such as the Common Code for the Coffee Community and the World Cocoa Foundation. Nestlé actively participates in international initiatives.

with child labor and employee health and safety all high priorities.000 extension workers and contractors currently offers support and training assistance to 111. which ensure we can maintain production of high-quality end products. social and environmental audits. Nestlé’s Doi Tung Experimental and Demonstration Farm helps hundreds of farmers in northern Thailand to grow Arabica coffee. demonstration farm.800 farmers via 28 projects in 21 countries as well as maintaining ongoing dialog with traders. Nestlé is also a member of AIM-PROGRESS Task Force. supply-chain-wide system of quality. There are no conditions attached to the assistance we give and farmers are not obliged to sell their produce to Nestlé. integrity and fairness in all business relationships.performance. which helps their coffee get a higher price. irrigation and harvesting techniques. Our team of 675 agronomists and approximately 5. This often begins by helping farmers through agricultural programs that share good environmental and water management practices. continue building partnerships and deliver measurable results. and when instances of non-compliance are discovered. Managing supplier relationships In 2007. we make clear our expectations with regard to the social conditions of the farmers we buy from. Nestlé conducted 3.400 audits of suppliers’ facilities to help ensure that they comply with Nestlé food safety standards. where Nestlé has set up a training center. governments and NGO partners. . nursery and buying station. Such projects secure supplies of higher-grade raw materials. corrective measures are needed for the supplier to be retained. Our objective is a global. It is Nestlé’s policy to apply sanctions in the event of misconduct or abuse of ethical standards and guidelines. Furthermore. China. which will not only reduce the total burden and any duplication of work. We have taken a similar approach in Yunnan Province. They receive practical training on coffee fertilization. but also help us to replicate best practice across all key sourcing areas. Nestlé insists on honesty. For example. an initiative of leading fastmoving consumer goods (FMCG) companies that supports the use of common evaluation methods to determine CSR supplier performance and help promote responsible sourcing practices within the supply chain.

Direct Purchasing guidelines Nestlé is aware of the strain agricultural processes can put on environmental resources and ecological habitats.Nestle India has a strong support from its parent company.The Company has been continuously introducing new products for its Indian patrons on a frequent basis. which is the world’s largest processed food and beverage company. Brand strength . All measures taken to support environmentally sound business practices and improve environmental performance are set out in Nestlé’s Policy on the Environment. In order to maximize the performance of our agricultural inputs and minimize potential negative impacts. with a presence in almost every country. Russia has been a very volatile market for Nestle. But a major portion of this comprises of Coffee (around 67% of the exports were that of Nescafe instant to Russia). swot analysis: Strengths Parent support .In India. thus expanding its product offerings. These brands are almost generic to their product categories. This constitutes a big chunk of the total exports to a single location. Nestle has some very strong brands like Nescafe. Maggi and Cerelac. wherever possible. The company has access to the parent’s hugely successful global folio of products and brands. Weakness Exports – The company’s exports stood at Rs 2.Detailed policies and guidelines concerning our position on these and other issues can be found in the Reporting section. . sustainable farming practices in the case of direct procurement from farmers.571 m at the end of 2003 (11% of revenues) and continue to grow at a decent pace. and its overall performance takes a hit often due to this factor. Product innovation . Nestlé has issued purchasing guidelines recommending. Historically.

The food industry requires high standards of hygiene. Nestle India could become an export hub for the parent in certain product categories. Nestle will have the inherent advantage of this trend. Off late. to liberalize its trade and investment policies to enable the country to better function in the . etc.Since manufacturing of some products is cheaper in India than in other South East Asian countries.The Company has the potential to expand to smaller towns and other geographies.The Company faces immense competition from the organized as well as the unorganized sectors.The Company has a complex supply chain management and the main issue for Nestle India is traceability.The Company has the option to expand its product folio by introducing more brands which its parents are famed for like breakfast cereals. quality of edible inputs and personnel. Opportunities Expansion . Product offerings . the per capita consumption of most FMCG products is likely to grow. The fragmented nature of the Indian market place complicates things more. With India's demographic profile changing in favor of the consuming class. Existing markets are not fully tapped and the company can increase presence by penetrating further. Carnation. Smartest Chocolates. Global hub . Threat Competition .Supply chain .

increasing packaging and manufacturing costs. The stock trades at a premium valuation over peers owing to its superior growth and quality product profile.globalize economy. But the companies’ may not be able to pass on the full burden of these onto the customers. the Indian Government has reduced the import duty of food segments thus intensifying the battle. the company is likely to continue being a dominant force in the Indian FMCG space. At Rs 604. the performance of the FMCG sector has been lackluster. the Nestle stock trades at nearly 25 times annualized 9mCY04 earnings and market cap to sales of 2. Conclusion The food processing business in India is at a nascent stage. . the dependence on monsoon is very high.Trend of increased consumer spends on consumer durables resulting in lower spending on FMCG products. and in turn. In the past 2-3 years. Sect oral woes .Rising prices of raw materials and fuels. Currently. Traditionally. only about 10% of the output is processed and consumed in packaged form thus highlighting huge potential for expansion and growth.4 xs. Changing consumer trends . Nestle is a leader in food processing in India and given the opportunity of growth along with the parent’s keen interest in developing its Indian subsidiary. despite the economy growing at a decent pace. off late the situation has been improving. but the trend is changing and the new fast food generation is slowly changing. Although. Indians believe in consuming fresh stuff rather then packaged or frozen.

Nestogen % of sales % growth Beverages % of sales % growth Prepared dishes/ cooking aids (Culinary) % of sales % growth Chocolates & confectionery Munch.627 29.4% 15.9% 14. Nestle Fruit & Nut Maggi (noodles.3% 4.0% 14.4% 11.880 Milk Products & Everyday Dairy nutrition Whitener.8% 21. pickles.6% 5. Nestea 42.646 17.8% 21.894 23.9% 3. Dahi.2% 8. milk powder. Milky Bar Choo.7% 3. Milo.4% 14.9% 11.6% 19.9% 3.197 20.4% 19.Nestle business break-up Segments Brands CY01 sales 8. Bar One. Cerelac.470 . Butter. Kit Kat.8% 4. Milkmaid. soups.3% 22.6% 2.0% 16.847 CY03 sales 9. Milk. sauces) Nescafe.366 % of sales % growth Total Sales % growth 13.227 18.7% -13.1% 26.7% 5.503 43. Classic.094 14.159 CY02 sales 8. Choco Stick.5% 10.4% 4.790 6.3% 2.449 23.765 43.


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